The Basics

My dad gave me one dollar bill ‘Cause I’m his smartest son, And I swapped it for two shiny quarters ‘Cause two is more than one! And then I took the quarters And traded them to Lou For three dimes- I guess he don’t know That three is more than two Just then along came old blind Bates And just cause he can’t see He gave me four nickels for my three dimes And four is more than three!

 We are Currently in a Economic Recession (Bad).  The economic recession is in part due to a failing housing market  Why did the housing market fail? Mostly do to variable rate mortgages  In what ways could this have been prevented

 Bismarck State: 4,029  Dickinson: 5,249  Mayville: 5,793  Minot State: 5,389  NDSCS (Wahpeton): 3,890  North Dakota State: 6,410  University of North Dakota: 6,727  U of M: 11,466

 Average room and Board 19 meals/week: 6,000 Dollars!

 Study of how people/nations use scarce resources to fulfill their wants Resource: tool in obtaining what you want Scarcity: Basic Problem in Economics - Idea that you do not have enough resources to fulfill your every want  Resources are SCARCE: Income, Time, etc. You choose how to use your scarce resources  How you make these choices is economics

 Needs: Food, Clothing, Shelter (enough to survive)  Wants: Everything else - Needs are greater than wants

Five Resources that allow for production and fulfillment of wants 1. Land: Surface and natural resources  Location  Ex. What’s worth more, and acre in Oklahoma, or an acre in Kuwait? 2. Labor: The work you do 3. Capital: Property people use to make goods and services  Machinery to make cars 4. Entrepreneurial Ability: ideas that improve business or create new ones 5. Technology

 Value of the next best thing given up in favor of what was chosen in a tradeoff. What is the Opportunity cost of you studying economics for an hour?

 There Ain’t No Such Thing As A Free Lunch  Idea that nothing is free Someone ALWAYS Pays  Trade-offs: Exchanging one thing for another I traded money for socks last night! I traded two extra hours of sleep for a viewing of the movie Body of Lies

 Production Possibilities: all the possible combinations of goods that can be produced from fixed amount of resources in a given time period Show trade-offs and opportunity costs visually

 A government spending decision: Guns vs. Butter Guns: Military spending Butter: Civilian goods

a. Economics is the political science that deals with unemployment, inflation, taxes, business cycles, money supply, etc… b. Economics is the social science that studies money and banking. c. Economics is the social science that examines the interaction of supply and demand. d. Economics is the social science concerned with the problem of scarcity.